Why in news?

The govt. proposed to launch Operation Greens scheme in the Budget 2018.

About Operation Greens scheme

1. It is a price fixation scheme aims at doubling the farmers’ income by the end of 2022 by ensuring them the right price for their produce.
2. It focusses on fruits and vegetables, starting with three basic vegetables such as onion, potatoes and tomatoes. It will help in controlling the high fluctuations in the prices of these vegetables.

Why Operation Greens?

1. India is the second largest producer of vegetables in the world, next only to China which produces 4x more than India. It means that India has still a long way to go in vegetable production.
2. The problem with vegetable commodities is that when their production increases sharply, their prices collapse because there is not enough modern storage capacity. Furthermore, the links to processing and organised retailing are very weak and small in India. Consequently, farmers often end up receiving less than 1/4th of what consumers pay for their produce in major cities.
3. Operation Greens aims at addressing these challenges.

Arguments favouring the scheme

1. The scheme will ensure farmers with the right price for their produce and consumers with low price to buy agricultural produce, due to the control in fluctuation of price in the market.
2. Operation Greens will increase the demand in the economy with its demand forecasting model.
3. This scheme is modelled on the lines of highly successful Operation Flood scheme which was driven by smallholders.
4. It will reduce rising incidents of farmers dumping potatoes and tomatoes on roads across the country due to high fluctuation in market prices.
5. Also, the prices of vegetables were very high to the point that the government put a ban on exports, de-stocking and even enforced income-tax raids on traders.
6. Income tax concessions to FPOs will help in bringing the much-needed infrastructure in the agro-horticultural sector.
7. It will create both forward and backward linkages which will promote the agricultural sector.
8. Due to the focused nature of the program, the scheme will be scalable over space and time, replicating the success of Operation Flood.

Arguments against the scheme

1. Linking of MSP with the cost of cultivation is a bad move as the cost of cultivation of crops is different across the country.
2. Linking of APMCs with the e-NAM market platform is criticized due to the lack of data disclosed on the performance of the e-NAM.
3. The scheme has no provision for institutional setup in implementing the scheme like the National Dairy Development Board (NDDB) in Operation Flood.

Key Challenges

1. How will farmers identify the right markets for their products that can give them the right prices on a sustainable basis?
2. Investments in storage infrastructure require amendments to the Essential Commodities Act with respect to the storage control order.
3. There are many different varieties of the produce grown in different climatic conditions and in different seasons, making an intervention in markets more complex.
4. In the horticultural sector, viable technology options for long-term storage, transport, and processing are underdeveloped. Moreover, the energy intensity of the existing technologies is high which poses an additional challenge, particularly with the rising fuel prices.
5. There is no ready market seamlessly connecting producers to consumers for those targeted vegetables which are at present very small compared to others.
6. Operation flood was spearheaded by Verghese Kurien to implement the vision and strategy of the scheme with honesty. Can the government locate another Kurien?

Way forward

1. Set a target that farmers must receive at least 60% of what consumers pay. In the case of milk, farmers get more than 75% of what consumers pay under the Operation Flood.
2. Connecting major consuming centres to the major producing centres with less number of intermediaries.
3. Farmer Producing Organisations (FPOs) should be effectively utilized as a starting point for aggregation of commodities, assaying, sorting, grading and packing with barcodes for traceability.
4. The market for the horticultural produces has to be developed through a viable business model.
5. Apart from controlling the price fluctuations, the government should also encourage every farmer in increasing production of these vegetables under the Operation Greens scheme.

Practice Question:

1. The government has launched Operation Greens with high hopes. Given the existing conditions, do you think the scheme will deliver? Critically analyse. 250 Words, 15 Marks.